Impact of Index Changes on the Dow

Today, Cisco and Travelers replaced Citigroup and GM on the Dow . Here is a look back at the previous 10 changes to the Dow and what happened to the benchmark in the days leading up to and following the change.

In the week leading up to today's change, the Dow gained 3.1% before falling this morning. For the past 30 years and 10 changes, on average, the week before the update seems to be have been positive for the Dow. The Dow has been up 1 month later only 50% of the time, but has been up 80% of the time 3 months after the change.

Dow Changes since 1979:

For the individual companies, there is less of a trend. Kraft clearly outperformed AIG during the financial crisis, but Honeywell and Altria outperformed their replacements, Bank of America and Chevron in early 2008.